BlackRock Sees Potential Recession as a “Major Catalyst” for Bitcoin

A potential recession in the United States could trigger the next bitcoin bull run due to liquidity injections and fiscal measures, according to BlackRock’s head of digital assets, Robert Mitchnick.

“If you look at bitcoin fundamentally on a long-term basis, it really seems like an asset that should be uncorrelated or even inversely correlated against certain risk factors that exist,” BlackRock global head of digital assets Robbie Mitchnick. pic.twitter.com/9HvuxH30vi

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According to the top executive, the supply deficit, decentralization, and independence of the first cryptocurrency will allow it to become a long-term hedging tool during economic stress.

 “Bitcoin will benefit from increased budget spending, deficit accumulation, and lower interest rates—typical signs of a recession,” he stated.

According to the specialist, the sharp outflow of funds from BTC-ETF was caused by the unwinding of arbitrage positions by hedge funds.

“The main hodlers are still in the game,” he explained, citing demand from institutional investors.

Mitchnick views the initiative to create a strategic bitcoin reserve as a signal of support for its uniqueness, although specific government accumulation methods are yet to be determined.

The expert is convinced that many professional investors see the current downturn as an opportunity. Such market participants are optimistic about the long-term role of digital gold as a portfolio hedge against economic instability, concluded the BlackRock representative.

Back in September, Mitchnick described bitcoin as a risk-free asset.